Sears Chairman Edward Lampert seemed to refute that notion in a message to shareholders Tuesday. He said the newly formed Sears Holdings is willing to forgo market-share gains in favor of "creating value" through improved cash flow and strategic acquisitions, for example.

"In the past, too often our predecessor companies pursued higher sales and accepted lower profits to meet objectives that, we believe, did not increase the value of the companies," Lampert said.

There are early signs that the same strategies Lampert used to lift Kmart out of Chapter 11 bankruptcy — such as cutting costs and improving cash flow — already are showing up at U.S. Sears stores, said independent retail analyst Richard Hastings.

Hastings called the performance at Sears stores "a nice turnaround despite tough weather conditions." He also pointed out that Kmart's 3.7 percent slide in same-store sales was a big improvement over the 12.9 percent drop from a year earlier.

Still, without growing market share, Sears will have a tough time competing against retailers like Target Corp. and J.C. Penney Co. Inc., which post consistent same-store sales growth, said Morningstar analyst Kim Picciola.

"If you don't have customers coming into your doors, it makes it really difficult to improve your bottom line."

The $12.3 billion acquisition of Sears by Kmart gave Sears Holdings a combined 3,800 stores in the United States and Canada, pairing Sears' most successful products — such as Craftsman tools, Kenmore appliances and DieHard batteries — with such Kmart brands as Martha Stewart, Jaclyn Smith and Joe Boxer. The company is converting 400 Kmart stores to the new mid-sized Sears Essential concept.

Since May 1, Sears has notified about 1,400 Kmart employees that their jobs would either be eliminated or relocated to its Hoffman Estates, Ill.-based headquarters, the company said in a filing with the Securities and Exchange Commission Tuesday. It said the move will result in a $57 million charge.

The company also laid off 780 Sears employees and 70 former Kmart employees during the first quarter, it said in the filing.

Both Sears Holdings and analysts said the quarter's performance offers a limited view of how well the nascent marriage of two faded retail icons is faring. The results included Kmart's full performance for the 13-week period but included only the five weeks of results from Sears stores following the $12.3 billion merger.

"The company therefore believes the results of operations are not representative of the ongoing results for Holdings," Sears said in a statement.

Had Sears stores' full-quarter results been included, Sears Holdings would have lost $78 million on flat revenue of $12.8 billion, including the accounting charge and $37 million in costs related to the merger, the company said. That's down from a profit of $38 million a year ago.